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Trading AUD/USD

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Written By
James Barra
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Written By
James Barra
James is an investment writer with a background in financial services. As a former management consultant, he has worked on major operational transformation programmes at prominent European banks. James authors, edits and fact-checks content for a series of investing websites.
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Edited By
Jemma Grist
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Edited By
Jemma Grist
Jemma is a writer, editor and fact-checker focused on retail trading and investing. Jemma brings a unique perspective to the forex, stock, and cryptocurrency markets and works across several investment websites as a researcher and broker analyst.
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Fact Checked By
William Berg
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Fact Checked By
William Berg
William contributes to several investment websites, leveraging his experience as a consultant for IPOs in the Nordic market and background providing localization for forex trading software. William has worked as a writer and fact-checker for a long row of financial publications.
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Updated
Jul 24, 2024

The popularity of the AUD/USD currency pair, otherwise known as the ‘Aussie’, has surged in recent years. As a result of Australia’s commodity boom in recent decades, the pair now unites two expanding and influential economies. This page will break down everything you need to know about the AUD/USD pair, from its benefits and drawbacks to currency correlations, history and strategy, including trading hours, signals, charts and top tips.

AUD/USD Trading Brokers

Click a broker for details
  1. 1
    FOREX.com
    Active Trader Program With A 15% Reduction In Costs
    Ratings
    4.9 / 5
    4 / 5
    4.3 / 5
    4.6 / 5
    4.6 / 5
    4.3 / 5
    4.8 / 5
    4.5 / 5
    3.6 / 5
    3.8 / 5
    $100
    0.01 Lots
    1:50
    NFA, CFTC
    Forex, Stocks, Futures, Futures Options
    MT4, MT5, TradingView, eSignal, AutoChartist, TradingCentral
    Wire Transfer, Credit Card, Debit Card, Visa, Mastercard, Skrill, Neteller, ACH Transfer
    USD, EUR, GBP, CAD, AUD, JPY, CHF, PLN
    Go To FOREX.com
  2. 2
    NinjaTrader
    Ratings
    4.3 / 5
    2.8 / 5
    2.9 / 5
    4.3 / 5
    4.5 / 5
    4 / 5
    4 / 5
    4 / 5
    3 / 5
    3.2 / 5
    $0
    0.01 Lots
    1:50
    NFA, CFTC
    Forex, Stocks, Options, Commodities, Futures, Crypto
    NinjaTrader Desktop, Web & Mobile, eSignal
    ACH Transfer, Debit Card, Wire Transfer, Cheque
    USD
    Go To NinjaTrader
  3. 3
    Interactive Brokers
    Ratings
    4.5 / 5
    3.5 / 5
    4.5 / 5
    4.3 / 5
    3.3 / 5
    3 / 5
    4.4 / 5
    4.3 / 5
    4.3 / 5
    4.5 / 5
    $0
    $100
    1:50
    FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA, AFM
    Stocks, Options, Futures, Forex, Funds, Bonds, ETFs, Mutual Funds, CFDs, Cryptocurrencies
    Trader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, eSignal, TradingCentral
    Cheque, ACH Transfer, Wire Transfer, Automated Customer Account Transfer Service, TransferWise, Debit Card
    USD, EUR, GBP, CAD, AUD, INR, JPY, SEK, NOK, DKK, CHF, AED, HUF
    Go To Interactive Brokers
  4. 4
    IG
    Forex trading involves risk. Losses can exceed deposits.
    Ratings
    4.9 / 5
    4 / 5
    4.5 / 5
    3.5 / 5
    4.8 / 5
    4.5 / 5
    4.9 / 5
    5 / 5
    4.6 / 5
    4 / 5
    $0
    0.01 Lots
    1:30 (Retail), 1:250 (Pro)
    FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOB, AFM
    CFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto, Spread Betting
    Web, ProRealTime, L2 Dealer, MT4, AutoChartist, TradingCentral
    PayPal, Wire Transfer, Mastercard, Credit Card, Visa, Debit Card
    USD, EUR, GBP, CAD, AUD, JPY, ZAR, SEK, DKK, CHF, HKD, SGD
    Go To IG
  5. 5
    OANDA US
    CFDs are not available to residents in the United States.
    Ratings
    4.5 / 5
    3.5 / 5
    2.8 / 5
    4 / 5
    4.5 / 5
    3.5 / 5
    4.3 / 5
    3.8 / 5
    4.7 / 5
    3.7 / 5
    $0
    0.01 Lots
    1:50
    NFA, CFTC
    Forex, Crypto with Paxos (Cryptocurrencies are offered through Paxos. Paxos is a separate legal entity from OANDA)
    OANDA Trade, MT4, TradingView, AutoChartist
    Wire Transfer, Visa, Mastercard, Debit Card, ACH Transfer
    USD, EUR, GBP, CAD, AUD, JPY, CHF, HKD, SGD
    Go To OANDA US
  6. 6
    Videforex
    20% to 200% Deposit Bonus
    $250
    $0.01
    1:500
    Binary Options, CFDs, Forex, Indices, Commodities, Crypto
    TradingView
    Skrill, Perfect Money, Bitcoin Payments, Neteller, Credit Card, Visa, Mastercard, Ethereum Payments
    USD, EUR, GBP, AUD, RUB
    Go To Videforex
  7. 7
    Plexytrade
    120% Cash Welcome Bonus
    Ratings
    1.5 / 5
    2.5 / 5
    2.5 / 5
    3.3 / 5
    2.5 / 5
    3.5 / 5
    0.5 / 5
    0.5 / 5
    4.8 / 5
    4.7 / 5
    $50
    0.01
    1:2000
    CFDs, Forex, Indices, Stocks, Commodities, Crypto
    MT4, MT5
    Bitcoin Payments, Ethereum Payments
    USD, EUR
    Go To Plexytrade
  8. 8
    IQCent
    20% to 200% Deposit Bonus
    Ratings
    2.5 / 5
    3.3 / 5
    2.4 / 5
    4.3 / 5
    3.8 / 5
    2.5 / 5
    3 / 5
    2 / 5
    4.3 / 5
    4.1 / 5
    $250
    $0.01
    1:500
    IFMRRC
    Binary Options, CFDs, Forex, Indices, Commodities, Crypto
    Online Platform, TradingView
    Credit Card, Debit Card, Wire Transfer, Bitcoin Payments, Ethereum Payments, Visa, Mastercard
    USD, EUR
    Go To IQCent
  9. 9
    RaceOption
    20% - 200% Deposit Bonus
    $250
    $0.01
    1:500
    Binary Options, CFDs
    TradingView
    Credit Card, Debit Card, Bitcoin Payments, Neteller, Skrill, Perfect Money, Mastercard, Visa, Ethereum Payments
    USD, EUR, GBP, AUD, RUB
    Go To RaceOption
  10. 10
    xChief
    $100 No Deposit Bonus
    $10
    0.01 Lots
    1:1000
    VFSC
    CFDs, Forex, Metals, Commodities, Stocks, Indices
    MT4, MT5
    Wire Transfer, Bitcoin Payments, Credit Card, UnionPay, Skrill, Neteller, WebMoney, Perfect Money, Debit Card, Ethereum Payments, FasaPay, Volet
    USD, EUR, GBP, JPY, CHF
    Go To xChief

Here is a short summary of why we think each broker belongs in this top list:

  1. FOREX.com - FOREX.com continues to uphold its stature as a premier FX broker, offering over 80 currency pairs and boasting some of the most competitive fees in the industry. With EUR/USD spreads dipping as low as 0.0 and $5 commission per $100k, it stands out. Moreover, its SMART Signals help to identify price behaviors across numerous major currency markets.
  2. NinjaTrader - NinjaTraders supports the trading of popular currencies including the EUR/USD. The software also offers advanced features to streamline the trading experience, including complex order types like market if touched (MIT) and one cancels other (OCO).
  3. Interactive Brokers - IBKR presents an extensive range of over 100 major, minor, and exotic forex pairs, surpassing the offerings of nearly all leading alternatives, though not CMC Markets. Forex trading occurs over multiple platforms and boasts institutional-grade spreads starting from 0.1 pips and 20 complex order types, including brackets, scale, and one-cancels-all (OCA) orders.
  4. IG - IG offers an above-average suite of 80+ currency pairs on its proprietary web platform, mobile app or MetaTrader 4, with more advanced charts and forex analysis tools available on the ProRealTime software. Forex spreads are competitive based on tests, starting from 0.1 pips on majors like the EUR/USD.
  5. OANDA US - OANDA offers a diverse selection of 68 currency pairs, more than many alternatives. The broker’s in-house platform offers superb day trading capabilities via powerful TradingView charts, including 65+ technical indicators and 11 customizable chart types.
  6. Videforex - Videforex offers trading on 35 currency pairs through leveraged CFDs with spreads from 0.1 pips. Alternatively, traders can use binaries to speculate on upward/downward price movements with payouts up to 98%. Integrated technical analysis, economic calendars, and market news, all available within the platform, help support FX trading decisions.
  7. Plexytrade - Plexytrade presents major, minor, and exotic forex pairs for trading, with leverage reaching 1:2000 and raw spreads starting from 0.0 - an enticing proposition for advanced traders seeking gains from minor price shifts. However, the downside lies in the limited selection, with only 41 currency pairs available, significantly fewer than the 100+ forex assets at IG.
  8. IQCent - IQCent traders can access CFDs or binary options on 45+ forex pairs. CFD spreads start from 0.3 pips and binary options payouts are decent up to 95%. This is competitive compared to Pocket Option, for example, offering forex payouts up to only 81%.
  9. RaceOption - RaceOption offers 25+ major and minor currency pairs on a no-frills, web-accessible platform with 30+ indicators and built-in copy trading opportunities for a hands-off investment approach.
  10. xChief - ForexChief supports spot foreign exchange trading on all account types for 40+ major, minor and exotic currency pairs. Trading takes place on the leading MT4 and MT5 platforms, which offer dozens of in-built technical tools for short-term forex strategies.

Trading AUD/USD Comparison

Trading AUD/USD Comparison
Broker Forex Assets EUR/USD Spread Forex App Rating Minimum Deposit Regulator
FOREX.com logo
80+ 1.2 4.9 / 5 $100 NFA, CFTC
NinjaTrader logo
50+ 1.3 3.5 / 5 $0 NFA, CFTC
Interactive Brokers logo
100+ 0.08-0.20 bps x trade value 4.3 / 5 $0 FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA, AFM
IG logo
80+ 0.8 4.9 / 5 $0 FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOB, AFM
OANDA US logo
65+ 1.6 4 / 5 $0 NFA, CFTC
Videforex logo
35+ 0.1 2.5 / 5 $250 -
Plexytrade logo
40+ 0.7 4.8 / 5 $50 -
IQCent logo
49 0.3 3 / 5 $250 IFMRRC
RaceOption logo
25+ Variable 4 / 5 $250 -
xChief logo
40 0.4 - $10 VFSC

FOREX.com

"FOREX.com remains a best-in-class brokerage for active forex traders of all experience levels, with over 80 currency pairs, tight spreads from 0.0 pips and low commissions. The powerful charting platforms collectively offer over 100 technical indicators, as well as extensive research tools."

Christian Harris, Reviewer

FOREX.com Quick Facts

Bonus OfferActive Trader Program With A 15% Reduction In Costs
GBPUSD Spread1.3
EURUSD Spread1.2
EURGBP Spread1.4
Total Assets80+
Leverage1:50
PlatformsMT4, MT5, TradingView, eSignal, AutoChartist, TradingCentral
Account CurrenciesUSD, EUR, GBP, CAD, AUD, JPY, CHF, PLN

Pros

  • The in-house Web Trader continues to shine as one of the best-designed platforms for aspiring day traders with a slick design and over 80 technical indicators for market analysis.
  • Alongside a choice of leading platforms, FOREX.com offers a superb suite of supplementary tools including Trading Central research, SMART Signals pattern scanner, trading signals, and strategy builders.
  • With over 20 years of experience, excellent regulatory oversight, and multiple accolades including runner-up in our 'Best Forex Broker' awards, FOREX.com boasts a global reputation as a trusted brokerage.

Cons

  • FOREX.com's MT4 platform offers approximately 600 instruments, significantly fewer than the over 5,500 available on its non-MetaTrader platforms.
  • Despite increasing its range of instruments, FOREX.com's product portfolio is still limited to forex and CFDs, so there are no options to invest in real stocks, real ETFs or real cryptocurrencies.
  • There’s no negative balance protection for US clients, so you may find yourself owing more money than your initial deposit into your account.
Visit FOREX.com
FOREX.com Review

NinjaTrader

"NinjaTrader continues to meet the demands of active futures traders looking for low fees and premium analysis tools. The platform hosts top-rate charting features including hundreds of indicators and 10+ chart types."

Tobias Robinson, Reviewer

NinjaTrader Quick Facts

GBPUSD Spread1.6
EURUSD Spread1.3
EURGBP Spread1.6
Total Assets50+
Leverage1:50
PlatformsNinjaTrader Desktop, Web & Mobile, eSignal
Account CurrenciesUSD

Pros

  • NinjaTrader continues to deliver comprehensive charting software for active day traders with bespoke technical indicators and widgets
  • You can get thousands of add-ons and applications from developers in 150+ countries
  • Traders can get free platform access and trade simulation capabilities in the unlimited demo

Cons

  • The premium platform tools come with an extra charge
  • Non forex and futures trading requires signing up with partner brokers
  • There is a withdrawal fee on some funding methods
Visit NinjaTrader
NinjaTrader Review

Interactive Brokers

"Interactive Brokers is one of the best brokers for advanced day traders, providing powerful charting platforms, real-time data, and customizable layouts, notably through the new IBKR Desktop application. Its superb pricing and advanced order options also make it highly attractive for day traders, while its diverse range of equities is still among the best in the industry."

Christian Harris, Reviewer

Interactive Brokers Quick Facts

GBPUSD Spread0.08-0.20 bps x trade value
EURUSD Spread0.08-0.20 bps x trade value
EURGBP Spread0.08-0.20 bps x trade value
Total Assets100+
Leverage1:50
PlatformsTrader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, eSignal, TradingCentral
Account CurrenciesUSD, EUR, GBP, CAD, AUD, INR, JPY, SEK, NOK, DKK, CHF, AED, HUF

Pros

  • With low commissions, tight spreads and a transparent fee structure, IBKR delivers a cost-effective environment for short-term traders.
  • There's a vast library of free or paid third-party research subscriptions catering to all types of traders, plus you can enjoy commission reimbursements from IBKR if you subscribe to Toggle AI.
  • The TWS platform has clearly been built for intermediate and advanced traders and comes with over 100 order types and a reliable real-time market data feed that rarely goes offline.

Cons

  • IBKR provides a wide range of research tools, but their distribution across trading platforms and the web-based 'Account Management' page lacks consistency, leading to a confusing user experience.
  • Support can be slow and frustrating based on tests, so you might find it challenging to reach customer service representatives promptly or encounter delays in resolving issues.
  • TWS’s learning curve is steep, and beginners may find it challenging to navigate the platform and understand all the features. Plus500's web platform is much better suited to new traders.
Visit Interactive Brokers
Interactive Brokers Review

IG

"IG continues to provide a comprehensive package with an intuitive web platform and best-in-class education for beginners, plus advanced charting tools, real-time data, and fast execution speeds for experienced day traders."

Christian Harris, Reviewer

IG Quick Facts

GBPUSD Spread0.9
EURUSD Spread0.8
EURGBP Spread0.9
Total Assets80+
Leverage1:30 (Retail), 1:250 (Pro)
PlatformsWeb, ProRealTime, L2 Dealer, MT4, AutoChartist, TradingCentral
Account CurrenciesUSD, EUR, GBP, CAD, AUD, JPY, ZAR, SEK, DKK, CHF, HKD, SGD

Pros

  • The ProRealTime advanced charting platform is free as long as certain modest monthly trading activity requirements are met
  • The proprietary web-based platform continues to caters to traders of all levels, with advanced charting tools and real-time market data useful for day trading
  • IG offers an extensive collection of professional and engaging educational resources, including webinars, articles, and analysis

Cons

  • Stock and CFD spreads still trail the cheapest brokers like CMC Markets based on tests
  • IG applies an inactivity fee of $12 per month after 2 years, deterring casual investors
  • Beginners might find IG’s fee structure complex, with various fees for different types of trades or services, potentially leading to confusion or unexpected charges
Visit IG
IG Review

OANDA US

"OANDA remains an excellent broker for US day traders seeking a user-friendly platform with premium analysis tools and a straightforward joining process. OANDA is also heavily regulated with a very high trust score."

Jemma Grist, Reviewer

OANDA US Quick Facts

GBPUSD Spread3.4
EURUSD Spread1.6
EURGBP Spread1.7
Total Assets65+
Leverage1:50
PlatformsOANDA Trade, MT4, TradingView, AutoChartist
Account CurrenciesUSD, EUR, GBP, CAD, AUD, JPY, CHF, HKD, SGD

Pros

  • Beginners can get started easily with $0 minimum initial deposit
  • Seasoned day traders can access industry-leading tools, including an MT4 premium upgrade and advanced charting provided by MotiveWave
  • The broker's API facilitates access to 25 years of deep historical data and rates from 200+ currencies

Cons

  • It's a shame that customer support is not available on weekends
  • There's only a small range of payment methods available, with no e-wallets supported
  • The range of day trading markets is limited to forex and cryptos only
Visit OANDA US
OANDA US Review

Videforex

"Videforex will serve traders looking for a no-frills, easy-to-use platform to speculate on the direction of popular financial markets through binaries. With a sign-up process that takes a matter of minutes and a web-accessible platform, getting started is a breeze. "

William Berg, Reviewer

Videforex Quick Facts

Bonus Offer20% to 200% Deposit Bonus
GBPUSD Spread0.1
EURUSD Spread0.1
EURGBP Spread0.1
Total Assets35+
Leverage1:500
PlatformsTradingView
Account CurrenciesUSD, EUR, GBP, AUD, RUB

Pros

  • Videforex regularly runs trading contests, offering practice opportunities and cash prizes to beginners and experienced traders, with position sizes from just ¢0.01.
  • Videforex is one of the few brokers with 24/7 multilingual video support, providing comprehensive assistance for active traders.
  • Traders can earn up to 98% payouts on 100+ assets with the broker’s binary options, bringing it in line with competitors like IQCent.

Cons

  • Videforex lacks authorization from a trusted regulator, meaning traders may receive little to zero safeguards like segregated client accounts.
  • The client terminal needs improvements based on our latest tests, sporting sometimes slow and unresponsive widgets which could dampen the experience for day traders.
  • The absence of any educational tools is a serious drawback for newer traders who can find blogs, videos and live trading sessions at category leaders.
Visit Videforex
Videforex Review

Plexytrade

"Plexytrade is a newcomer in the brokerage scene with attention-grabbing features like 1:2000 leverage, zero spreads on select instruments and fast execution speeds of less than 46 milliseconds. However, the absence of regulation is a significant concern, while the non-existent research and educational tools place it far behind industry frontrunners."

Christian Harris, Reviewer

Plexytrade Quick Facts

Bonus Offer120% Cash Welcome Bonus
GBPUSD Spread0.8
EURUSD Spread0.7
EURGBP Spread1.1
Total Assets40+
Leverage1:2000
PlatformsMT4, MT5
Account CurrenciesUSD, EUR

Pros

  • Despite lacking regulation, Plexytrade provides negative balance protection and reinforces safety protocols by holding client funds in segregated accounts.
  • US residents are accepted as clients, distinguishing Plexytrade as one of the rare offshore brokers that cater to US-based traders.
  • Plexytrade accommodates a range of trading methods and short-term strategies, including scalping, hedging, and automated trading.

Cons

  • There are no research and educational materials, falling short of alternatives like IG, while access to the economic calendar is restricted to clients with balances of $500.
  • There are no social or copy trading features for inexperienced traders to replicate the trades of more experienced investors, trailing category leaders like eToro.
  • Plexytrade lacks regulation in major jurisdictions, significantly increasing the risks of opening an account and depositing funds.
Visit Plexytrade
Plexytrade Review

IQCent

"IQCent will appeal to day traders looking for a straightforward binary options and CFD trading platform with low fees, a range of accounts, and copy trading. Getting started takes less than 1 minute and a $250 deposit. "

Jemma Grist, Reviewer

IQCent Quick Facts

Bonus Offer20% to 200% Deposit Bonus
GBPUSD Spread0.8
EURUSD Spread0.3
EURGBP Spread0.8
Total Assets49
Leverage1:500
PlatformsOnline Platform, TradingView
Account CurrenciesUSD, EUR

Pros

  • Keen traders can take part in trading contests with cash prizes
  • The broker's 24/7 customer support is fast and reliable, responding within 1 minute during tests
  • IQCent is one of the few binary options brokers that also offers a copy trading service for hands-off traders

Cons

  • The market analysis is very basic with limited technical summaries and insights from analysts
  • The broker is not overseen by a respected regulator, though this is common among binary options firms
  • There's no automated trading support for algo traders
Visit IQCent
IQCent Review

RaceOption

"RaceOption will appeal to investors looking for a feature-rich binary options trading experience with regular contests, account-based perks, and copy trading. The catch is its unregulated status, with little to zero investor protections available based on our investigations."

William Berg, Reviewer

RaceOption Quick Facts

Bonus Offer20% - 200% Deposit Bonus
GBPUSD SpreadVariable
EURUSD SpreadVariable
EURGBP SpreadVariable
Total Assets25+
Leverage1:500
PlatformsTradingView
Account CurrenciesUSD, EUR, GBP, AUD, RUB

Pros

  • RaceOption is in the less than 1% of brokers that offers video chat, available 24/7 in multiple languages, although the knowledge of agents about trading and regulatory issues needs improvement from our direct experience.
  • Payouts on popular underlying assets like EUR/USD can reach 95%, beating out most alternatives based on our evaluations, and increasing potential returns, while the first 3 trades are risk-free in Silver and Gold accounts.
  • RaceOption makes account funding a breeze with fee-free and near-instant deposits via bank cards and cryptos, plus guaranteed withdrawals processing within 1 hour.

Cons

  • RaceOption is an unregulated, high-risk broker that doesn’t provide investor compensation or legal recourse options should you run into trading or withdrawal issues.
  • RaceOption is one of the only brokers not to offer a demo account, which when considered alongside the absence of education, makes this broker a poor choice for beginners.
  • While still affordable for many retail investors, the $250 minimum deposit raises the entry barrier, especially compared to Deriv and World Forex who are designed for budget traders.
Visit RaceOption
RaceOption Review

xChief

"xChief continues to prove popular with investors looking to trade highly leveraged CFDs on the popular MetaTrader platforms. The broker's rebate scheme and investment accounts will particularly appeal to seasoned traders. However, the lack of top-tier regulatory oversight is a major drawback."

William Berg, Reviewer

xChief Quick Facts

Bonus Offer$100 No Deposit Bonus
GBPUSD Spread0.9
EURUSD Spread0.4
EURGBP Spread0.9
Total Assets40
Leverage1:1000
PlatformsMT4, MT5
Account CurrenciesUSD, EUR, GBP, JPY, CHF

Pros

  • xChief delivers a high-quality day trading environment via the MT4 and MT5 platforms, with market-leading charts, indicators and tools
  • The broker offers several account types to suit different traders, including a Cent account for beginners and pro-level hedging/netting accounts
  • xChief offers STP/ECN execution with low spreads from 0.0 pips and low commission rates starting from $2.50 per side

Cons

  • The total range of 150+ assets is much lower than most competitors who typically offer hundreds
  • The broker trails competitors when it comes to research tools and educational resources
  • The Classic+ and Cent accounts provide access to fewer instruments than the other account types, at 50+ and 35+, respectively
Visit xChief
xChief Review

Chart

AUDUSD Chart by TradingView

Breaking Down ‘AUD/USD’

Before we get into the details, what precisely does AUD/USD mean? Quite simply, the exchange rate tells you how many US dollars (the quote currency) are required to purchase one Australian dollar (the base currency).

The AUD/USD pair is now the fourth most actively traded currency pair. In recent years, the AUD/USD has seen months where it represents around 7% of total forex market turnover. However, it is not one of the six that form the US dollar index (USDX).

Why Day Trade AUD/USD?

Before we consider AUD/USD day trading strategies and fundamental analysis, why should you opt for this particular currency pair when there are so many options currently available?

Drawbacks & Risks

Despite AUD/USD statistics demonstrating promising growth and attractive trends, there remain several drawbacks and risks to trading with this currency pair.

Influences on Movement

By reviewing AUD/USD relationship through long-term data, it is clear there are several main factors that influence prices. These include:

Commodities & Trading

Other Influences

So, whilst day trading the AUD/USD pair calls for technical analysis via daily, weekly, and monthly price charts, it also demands an understanding of the underlying economic forces at play.

Currency Correlations

Part of your AUD/USD trading view also needs to take into account relevant currency correlations. The success and failures of certain pairs will influence others.

Correlation is a measure ranging from -1 to +1, which determines whether the pair is positively or negatively correlated. Correlations can also change over time.

Note the correlation with the USD/CAD pair may also be partly attributed to the positive correlation between the Australian and Canadian economies, as both are heavily involved in commodity exports.

Gold Correlation

Another important area is AUD/USD correlation with gold. Gold has a positive correlation with AUD/USD. So, when gold is going up, AUD/USD goes down. When gold goes down, AUD/USD goes down.

What does this mean for you? It means you can look at the movement in gold markets to make AUD/USD forecasts for tomorrow.  So, get up currency correlations in a yearly chart and your future outlook could be seriously enhanced. Even looking at movement last week or in recent market hours may suggest price action is imminent.

AUD/USD Day Trading Strategy

Regardless of whether you opt for a breakout or scalping strategy, there are a number of factors to consider below that could enhance your intraday trading performance.

Timing

Regardless of what strategy you use for live, online AUD/USD day trading, knowing the best time to trade could make all the difference to your end of day profits. Whilst 24/7 forex trading is available, certain time periods will offer the greater levels of volatility and volume needed to generate substantial profits.

You will find the biggest daily moves and greatest volume during Australian working hours (overlapping with the Asian trading session), plus during the most active US trading hours. Economic reports, such as non-farm payrolls, durable goods orders, and consumer inflation data, can also all trigger significant spikes and shifts.

So, for the greatest volatility, focus your attention on day trading between 00:00 and 02:00 GMT, plus 06:00 to 08:00 GMT. Then for the most volume and trade activity, head back online between 12:00 and 17:00 GMT.

News

There are a number of different approaches you can take day trading on the AUD/USD currency pair. Some will utilise historical price charts and basic daily charts, whilst others will make their expectations based on news updates.

Market sentiment and price action can quickly shift with breaking news. If you can anticipate where the trend will head, you can capitalise on these news updates.

To do that, you need to have reliable news resources you can turn to. Some of the most highly regarded include XE, CNBC, Reuters, Bloomberg, Forex Factory, Yahoo Finance and Google Finance. These can prove invaluable. On top of standard AUD/USD commentary and the latest technical analysis, they can also offer the following:

Many of the above sources will also have obscure trends and unusual daily moves explained by experienced FX traders. So, used correctly, the news today is a powerful weapon to add to your day trading arsenal.

Example

Breakout strategies are often thought to be effective techniques for capitalising on fluctuations when the AUD/USD currency pair is considered so volatile. After monitoring support and resistance, positions should be entered in anticipation of a break. If the price continues in this direction, you can hopefully profit.

Reversal at Support/Resistance

Look no further for a straightforward AUD/USD day trading strategy. Support or resistance could be a horizontal or diagonal line, but it is the point that price has reversed off at least twice before. This should include the starting point of your support/resistance line.

It’s worth noting support and resistance are usually areas, instead of specific prices. So, your trade setup can actually take place slightly above or below.

The support and resistance then tell you to be ready because a reversal or breakout could be fast approaching. You would then need to wait for consolidation near your support/resistance. If the price breaks above a consolidation near support or breaks below a consolidation near resistance, then you have your trade signal.

When the reverse signal does then occur, take your trade when the price moves just above the consolidation near your support, or just below consolidation near your resistance. If your AUD/USD pattern does indeed appear, you are anticipating the price will ricochet off support or fall off resistance.

However, if the price fails to do that and instead breaks above the major resistance area, or breaks below the major support area, then you should exit the trade as soon as possible.

Risk Management

AUD/USD discussions often focus on buy and sell rates, hourly forecasts, opening and closing positions, daily ranges, but not on how to mitigate risk. It doesn’t matter if it’s the lowest or highest-ever historical prices today, without an effective money management system you may not still be in the game next week.

So, what precisely is an AUD/USD risk system? Its meaning is simple. It is a way of protecting against losses by pre-determining position size. Most traders recommend risking no more than 1-2% of your account balance on a single trade.

For example, if you have $10,000 in your account, you wouldn’t bet more than $100 to $200 on a single trade. That way even if you lose, you still live to fight another day. This basic technique could prevent you from sinking into the red.

As famous trader Paul Tudor Jones asserted, ‘risk control is the most important thing in trading.’

So, forget closing prices, buy/sell spreads and picturesque candlestick charts, sit down and determine your risk parameters first. Moving forwards and capitalising on the next rally with promising pip movement will be far easier if you still have capital left in your account.

Last Word on Strategy

Whatever your trading plan involves, from daily pivot points to scalping, employ your strategy at the most effective time. Plus, take into account the latest news updates and breaking announcements that may help you predict future price movement.

History

Early History

There was a time when the Australian dollar was connected to the British pound. The Australian dollar was at the mercy of the pound, rising and falling in tandem. Yet 1946 brought about a change. The Australian dollar was pegged to the US dollar for a short period before it returned to the British pound.

By the time 1966 rolled around, the Australian dollar was launched as a decimal currency, followed by the deregulation of Australia’s financial system. The result of this was significant price movement in global forex rates as the open-market system was now in the crosshairs of the country’s reserve bank.

It wasn’t until 1983 that the AUD/USD pair begin to display its strength. Copper, iron, and gold exports were partly behind this illustration of might. These represent approximately one billion Australian dollars and around half of the nation’s total exports.

As trading relations with China and other exporting became stable, the country and currency enjoyed consistent growth.

Recent History

Many traders do not realise how much your AUD/USD and forex outlook of today is shaped by past events. Understanding the context of this currency pair’s relationship may allow you to make more accurate exchange rate forecasts and predictions.

The Australian economy and the popularity of trading Australian dollar currency pairs has increased in recent years. In 2012, the AUD/USD pair was the third most popular currency pair in the world, jumping two places in just two years. A stable trading relationship with China, high-interest rates, plus commodity-exporting is partly to thank.

In fact, the Australian economy has grown year on year since 2001, facing just one obstacle during the 2008 global financial crisis.

For the most part, minimal intervention from the RBA in the last ten years has attracted huge numbers of FX traders to the AUD/USD currency pair. However, surprisingly strong reversing trends when central banks make unexpected announcements can lead to traders suffering substantial financial losses.

Role of Australian Dollar

An important element of AUD/USD trading economics is recognising the role of the Australian dollar. Currency forecasts will reflect Australia’s economic influence.

Today Australia boasts the 13th largest economy in the world. In 2013 it had a GDP of an impressive $1.56 trillion. Services form 68.6% of GDP. Their most influential services include finance, media, education, and logistics.

However, as touched upon elsewhere on this page, the Australian dollar is a commodity-based currency. For example, you will see a high correlation with the prices of exported commodities, from coal and iron to copper and gold. The strength of the Australian dollar vs the US dollar is tied to the success of their exported goods.

So, the Australian dollar plays a huge role in international trade. As such, to make accurate predictions on your live forex chart, you should consider the following key indicators:

In addition, to find reports on their grain commodities, see Australia’s Bureau of Agricultural and Resource Economics and Sciences (ABARES). Online you will find free data on crop planting, weather, harvests, mine output, plus other grain commodity statistics.

The Australian dollar also now plays an important role in the forex space. Because of the economy’s consistent strength, the Aussie is now the fifth most traded currency, playing a part in 8.6% of all FX trading.

So, the Australian dollar plays a vital role in international commodities trading, as well as forex trading. Plus, the Australian economy is one of a select few large economies still with a AAA Debt rating. This further highlights its political and economic stability. All of these factors will continue to attract aspiring AUD/USD traders.

Role of US Dollar

You cannot make accurate daily forecasts, let alone 3-month or 12-month AUD/USD forecasts without understanding the crucial role the US dollar plays. Their GDP represents around 25% of the global nominal GDP.

After China, the US is the second-largest trading nation in the world. They are also the second-largest manufacturer. In 2013, their industrial production was $2.43 trillion and greater than the output of Germany, France, India, and Brazil combined.

Below are just a few of the vital roles the US dollar plays:

When you consider the staggering size of the US economy and its numerous strengths, it’s straightforward to see how economic data on the US can impact the forex marketplace, and in turn, the AUD/USD currency.

Some of the top economic indicators that influence live FX exchange rates include Trade Balance, Consumer Price Index (CPI), Producer Price Index (PPI), Retail Sales and Consumer Confidence.

Your AUD/USD technical analysis should consider many of these data releases in the economic calendar. In addition, the Federal Open Market Committee meetings are held periodically each year, with press conferences, expectations and forecasts released every few weeks. Each announcement could potentially trigger shifts in the AUD/USD currency pair.

Final Word on AUD/USD Trading

The AUD/USD promises day traders all the attributes needed to generate substantial profits, including rich liquidity and volatility. However, this hunting ground comes with tough competition, so asserting an edge will require a number of elements.

Because it’s one of the seven major pairs that contain the US dollar, staying aware of both monetary policy and interest rates set by the Fed and RBA is crucial. Careful technical analysis, including real-time charts and the news, will all be needed to capitalise on those bullish or bearish patterns. Just as important though, is finding the best forex trading platform for your individual needs.

FAQs

What Is AUD/USD?

AUD/USD is the fourth most actively traded currency pair in the world. The exchange rate determines how many US dollars are needed to purchase one Australian dollar. AUD/USD is also a ‘major’ pair which means it includes the US dollar, is traded in high volumes and is highly liquid.

Why Should I Start Trading AUD/USD?

Since the Australian dollar is one of the highest performing major currencies, the AUD/USD pair enjoys high liquidity and volatility. The pair is also positively correlated with several other currency pairs, as well as commodities such as gold.

What Is The Best Trading Strategy For AUD/USD?

The best trading strategy for AUD/USD ultimately depends on each individual trader. With that said, it’s always important to consider the optimum times to trade AUD/USD, as well as the best new resources for fundamental analysis. Whether you’re conducting Elliott Wave analysis or support and resistance strategies, make sure to always implement proper risk management.

Where Can I Trade AUD/USD?

As is it one of the most popular major currency pairs, you can trade AUD/USD at virtually any online forex broker. To start analysing current AUD/USD charts and begin trading, you will need to register at your chosen broker and sign in to the trading platform.